Hindustan Oil Exploration Company reported more than doubling of its revenues for the quarter ended September, but its net profit remained flat due to project-related expenses.
The oil and gas producer’s consolidated turnover increased to ₹125 crore in the quarter ended September from ₹45 crore in the comparable quarter of last year. This was due to a higher price it got for its gas from the Dirok field in Assam — the government-fixed price of this gas rose from $3 per MMBTU to $ 6.5. (This has further risen to $8.57 from October.) HOEC produces 1 million cubic meters (37,300 MMBTU) of gas a day from the field.
However, its expenses rose to ₹105 crore from ₹27 crore in the comparable period of last year. This was because of expenses related to the B-80 field in Bombay High, which is under development. A wholly owned subsidiary provides two equipment—a mobile offshore unit and a floating storage unit, for which the company pays a rent to the subsidiary.
As a result, HOEC’s net profit was ₹17.7 crore, compared with ₹17 crore, previously. In the April-June quarter, its net profit was ₹32 crore, as the company had the benefit of sales of gas from one well in B-80 for about 15 days, before the well had to be shut down for repairs.
The B-80 field, which HOEC won in the first round of government’s auctions of discovered small fields, in 2016, is a high potential one, but has proven to be tricky to be brought on stream.
PY-1 field
HOEC also owns the PY-1 field in the Bay of Bengal, where it produces a small quantity of gas of a million cubic feet, which it sells to GAIL. PY-1 too holds promise, if only HOEC could drill through the ‘basement’ of hard rock and reach the gas below. The company intends to take this up once B-80 goes fully on stream.